While the Ontario Expert Commission on Pensions report is largely being panned by observers for having too limited a mandate, the report by the Alberta-British Columbia Joint Expert Panel on Pension Standards is receiving positive feedback for a broad and sober assessment of what a modern retirement system should look like.
“They’ve left no stone unturned,” says Greg Hurst a principal with Morneau Sobeco in Vancouver. “They’ve looked at the current regulatory environment and concluded that it needs a wholesale rewrite.”
Hurst says that while the B.C./Alberta panel had fewer resources than its Ontario counterpart, it was given a holistic political mandate and was not restricted in scope.
While most of the report’s recommendations are feasible, the only potential problem he sees is the creation of a pension advocate.
“A pension advocate appears to some as another level of bureaucracy, but I don’t agree,” Hurst says. “In the current context a regulator is not an advocate for the system, and what is sorely needed in Canada is someone to advocate for pensions and pension coverage.”
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Kevin Sorhaitz, a principal at Buck, also likes what he sees in the report, particularly as it deals with issues concerning defined benefit (DB), defined contribution (DC), and group RRSPs.
He feels the commission had a broad mandate and is particularly impressed with the focus on financial literacy as part of high school education. With the rise of DC plans, he explains, it’s increasingly important for people to be able to make their own decisions regarding retirement savings.
Sorhaitz believes the report may lay the foundation for a national supplemental pension plan, as called for recently by the likes of pension expert Keith Ambachtsheer and former head of the Ontario Teachers’ Pension Plan Claude Lamoureux.
“If you believe the three pillars of retirement savings still applies, the second pillar being occupational pension plans, the coverage is just not broad enough across the country,” he says. “That means there’s much more reliance on the government pension plan and individual savings. So I do think there’s broad recognition across Canada to increase pension coverage.”
Hurst agrees, adding that there is a growing momentum across the country to creating such a program, and that the proposed plan could very well serve as a base model for a national plan.
“There’s a wonderful opportunity for British Columbia and Alberta to show leadership in building that kind of a program,” he says. Hurst points to B.C. Premier Campbell’s announcement in October regarding a new defined contribution (DC) plan expected to be available to employers, employees and self-employed people on a voluntary basis.
“One of the great difficulties in terms of pension regulation is getting the attention of politicians,” he says. “The environment now seems better to do that than in the past.”
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